The reputation of a business is a highly intangible but critically influential factor in a company's ability to achieve sustainable competitive advantage in its markets.
Part of understanding the importance of reputation to a business lies in the recognition and value of its stakeholders, government bodies or industry associations. However, what is generally less well understood - especially with smaller companies - is how to manage and mould the firm's external reputation.
WHY IT MATTERS
Before we look at what reputation is and how to manage it, let's ask a key question: "Does reputation matter?" The short answer is yes - have you seen a Ratners Jewellery store since Gerald Ratner told a Confederation of British Industry meeting that his company's products were "total crap"? Of course you haven't, because his "joke" wiped £500 million off the group's value almost overnight.
Likewise, when Enron and Worldcom were shown to have lied and cheated in their accounting, their reputation with the stock market, their customers and their staff dived. And so too did the companies - into total oblivion.
So reputation is important to major corporations, but is it also important to smaller companies? Yes, because it is your reputation that gets your sales people through the door and winning business; it is your reputation for quality service, quality products and timely delivery that gets you repeat business; and it is your reputation for going the extra mile that gets recommendations from your customers. And it's your reputation as an employer that gets you the best (or worst) staff that in turn affects the reputation they give you when dealing with the outside world.
HOW TO DEFINE IT
Reputation can't easily be defined and probably never will be - largely because it is a dynamic aspect with different things mattering to different people at different times. Research demonstrates this with quality of product and service declining in relative importance and honesty rising to a much higher level.
Rather than trying to define reputation in terms of factors, try this: 'Reputation is what people say about you when you're not there'. And of course managing that reputation for you is a key aim of any good PR agency.
Reputation is intangible and complex but, above all, it is actually emotional and is often a very deeply-held view. Reputation is what people think. What they think about you depends not only on what you are, but how much they know about you, in what context they know you and how all of this fits into their personal set of values. We each know that our personal reputation is important to us - it is the currency that allows us to operate freely in the world.
The same is true of organisations. A company that has a "good name" generally succeeds where lesser ones might fail. Companies with good reputations generally ride out storms and crises far better than those with lesser reputations.
So, what sorts out the companies with good reputations from those with next to no reputation - and those with bad reputations? Well, a company's reputation can be said to depend on a number of interconnecting factors and on how well the firm communicates its values, capabilities and successes to those audiences.
Your company's performance in each of these areas can affect your reputation in the minds of these people. Actual reputation is not necessarily what your company is or does in these areas - it is what those people think your company is or does.
STAKEHOLDERS WHO CARE
Every company has a number of different "publics" that matter to it - to greater or lesser degrees. As business managers we often confine our thinking to only one public - our customers. But there are many other publics and they do matter. These people are called stakeholders and can include employees, suppliers, investors, the bank manager, competitors, the media, politicians, non-governmental organisations. Often most of these are ignored or, at best, are seen as peripheral.
Put another way:: "A stakeholder is anyone who can bugger up your business".
So can your employees bugger up your business? Sure they can. Your suppliers? Yes. Your bank manager? Far too easily. Your investors? Of course.
It seems all of these groups - most of whom we don't pro-actively manage our reputations with - have a massive importance in the success of our businesses. They make better friends than enemies, so you need to manage your reputation with them.
Each group of stakeholders has different interests and judges you against different values and terms of reference, but most groups have a core set of common beliefs and expectations - which makes the process of building and managing your reputation possible.
TAMING THE TIGER
If you're a high growth company then, both corporately and individually, you've probably got your head down concentrating on growing and keeping your customers happy - probably blissfully unaware that there's a loose tiger out there that needs taming, before it has chance to bite you. Very often the reputation of a high growth company is actually the reputation of the founder entrepreneur himself. Just look at Virgin and Apple or Microsoft.
Quite often he or she feels quite capable of driving his own reputation, but unless some of that reputation is transferred to the business and 'institutionalised' then it is only he/she and not the company that has high standing with customers, suppliers, banks and investors. This can make the company very vulnerable should the founder leave or fall ill - or indeed if anything in his personal life affects his reputation.
MANAGING REPUTATION
Let's look at the basic elements of reputation management:
1. Draw up a reputation score card. In its simplest form just list your stakeholders and the reputation issues that managers and staff think are important to each. Put them into a matrix and colour where you think your reputation is strong, weak or variable. Immediately, you have a visual tool by which to focus your reputation management efforts and communications.
2. The ideal next step would be to get some external validation. Consider commissioning some simple research to find out what issues stakeholder groups believe to be important and where you really fit on those scales. Think seriously about engaging a reputation management PR agency to help you with this - we can add significant value.
3. Identify differences between perceptions (what stakeholders think) and what you know to be the truth. These are areas where you need to concentrate on communicating your true position.
4. If there are areas where your reputation is below par, look at what lies behind that. For example, if your stakeholders think that your reputation as an employer is poor, then you probably are a poor employer. No amount of PR can fix this element of your reputation until you've fixed the problem.
5. Consider how you communicate your messages to stakeholders. Remember that if you don't tell them, no one else will. Techniques vary from a regular letter or phone call from someone senior in the organisation to news in the media, regular newsletters by post or email and advertising. Never assume stakeholders already know something if you've only told them once.
6. Include your staff in the reputation management process. LISTEN to their views. Not only do they often know what's wrong but, if they know what's wrong and you're not fixing it, they'll be telling your suppliers, customers and others.
7. Build "care for the company reputation" into the company culture. Insert one simple question into the business decision making process: "How does it affect our reputation if it goes wrong?"
8. Build a crisis management plan by thinking of the things that could go wrong and devising a plan to manage it. Best practice is to react to any crisis immediately and openly. The CEO needs to be seen to be involved in solving the crisis - heads in the sand do not save reputations. Honesty and action do.
9. Don't think of this as a one-off exercise. Make sure the board reviews corporate reputation at least quarterly. And finally, remember: It takes many years to establish a reputation and only minutes to ruin it. Look after it with great care.
----------------------------------------------------
PhilTurtle is a serial Entrepreneur, Business Consultant and PR Expert and CEO of Turtle Consulting Group. Turtle Consulting Group is a Tech PR agency that specialises in technology PR and business to business PR. For more information visit http://www.turtleconsulting.com
EasyPublish this article: http://submityourarticle.com/articles/easypublish.php?art_id=238342
No comments:
Post a Comment